Question 1

Mindy is a member of the Zeta Omega Sorority. While driving to a local food bank to deliver donations from the sorority members, she causes an accident. She collides with a large carrot truck. The truck driver subsequently sues Mindy and her sorority for her negligent driving. Which of the following is a true statement?

Accepted Answer

A)  Mindy's PAP Liability coverage will cover her, but not the sorority. 
B)  Mindy's PAP Liability coverage will cover the driver of the carrot truck, but not her. 
C)  Mindy's PAP Liability coverage will cover both Mindy and the sorority. 
D)  None of the above

Question 2

Chuck has an accident in which he is at fault. His liability limits on his PAP are 100/200/50. Five people besides Chuck are injured in the auto accident. Assuming that the following claims are paid in the order in which they are listed, how much will Chuck's insurer pay, in total, for all the bodily injuries? Joe = $75,000 Mama = $125,000 Fred = $2,500 Granny = $2,500 Bo = $5,000

Accepted Answer

A)  $75,000 
B)  $200,000 
C)  $185,000 
D)  $100,000

Question 3

Underinsured Motorist coverage:

Accepted Answer

A)  is the same as Uninsured Motorist coverage 
B)  is automatically included in the PAP's Part C coverage 
C)  pays for property damage you cause when victims have no coverage 
D)  none of the above

Question 4

You collide with another vehicle and the accident is your fault. You may collect for damages to your vehicle, less the deductible, from your insurance company under Coverage D, Collision, if a premium for Collision has been paid.

Accepted Answer

A) True 
 B)False

Question 5

Your vehicle is damaged by another vehicle and the accident is the fault of the other driver. You may collect for damages to your vehicle, less the deductible, from your insurance company under Coverage D, Collision, if a premium for Collision has been paid.

Accepted Answer

A) True 
 B)False

Question 6

Which one of the following is false concerning the PAP?

Accepted Answer

A)  A pedestrian struck by an automobile can collect under his Medical Payments coverage 
B)  Defense, settlement, and supplementary payments are in excess of the stated limits of liability in the PAP 
C)  Other than Collision coverage will pay for theft of the automobile 
D)  Medical Payments coverage will not pay for the insured's injuries if the accident is the insured's fault

Question 7

You are in an automobile accident with an uninsured motorist, and the accident is your fault. Your Uninsured Motorist limits are 10/20 and your medical bills are $22,000.You collect from your UM coverage:

Accepted Answer

A)  $0 
B)  $10,000 
C)  $20,000 
D)  $22,000

Question 8

Celeste has Liability coverage limits on her PAP of 100/200/50. She has an accident and finds herself liable for damages awarded in the following order: Bodily injury to A - $250,000
Bodily injury to B - $30,000
Bodily injury to C - $150,000
Property Damage to D - $48,000
Which of the following is true?

Accepted Answer

A)  Her insurer will pay $150,000 to C. 
B)  Her insurer will pay $250,000 to A. 
C)  Her insurer will pay $30,000 to B. 
D)  Both A and C are true.

Question 9

Compulsory Liability Insurance laws are designed to:

Accepted Answer

A)  reduce automobile insurance rates 
B)  decrease the number of people who carry automobile insurance 
C)  reduce the number of automobile accidents 
D)  force individuals to purchase auto liability insurance

Question 10

Bob loans his car to Norm, and Norm wrecks the car. Both Bob and Norm have PAP's on their owned vehicles, and both men have purchased all four major coverages (A, B, C and D) on their automobiles. Whose policy will pay for this loss on a PRIMARY basis?

Accepted Answer

A)  Bob's 
B)  Norm's 
C)  They'll both be primary and will share the loss equally. 
D)  Neither policy will pay on a primary basis because the loss is not covered.

Question 11

Which of the following coverages is provided by the PAP?

Accepted Answer

A)  Rental car reimbursement coverage for any car rental, regardless of why the car is needed 
B)  Liability insurance 
C)  Medical expense for disease 
D)  Personal property coverage

Question 12

If Paul causes a car accident, and the car he hits is driven by an insured motorist, Paul's PAP will pay for the other driver's damages:

Accepted Answer

A)  under coverage A, Liability 
B)  under coverage C, Uninsured Motorist 
C)  under both coverages A and C 
D)  nothing since an uninsured motorist was injured

Question 13

All of the following persons are covered under Larry's PAP except:

Accepted Answer

A)  Larry's wife, who borrows a neighbor's car 
B)  Larry's son, who borrows a friend's car to get to work 
C)  Larry, while driving a car he borrowed from his employer to run an errand 
D)  Larry, while driving a borrowed commercial wrecker truck to tow his car to a repair garage

Question 14

Latisha runs over a deer with her car. The ACV of her vehicle is $7,250. To repair the damages will cost $4,375. What will the insurer likely pay Latisha for this claim, assuming that her Collision deductible is $500, and her Other than Collision deductible is $200?

Accepted Answer

A)  $3,875 
B)  $4,175 
C)  $6,750 
D)  none of the above

Question 15

Uninsured Motorist coverage:

Accepted Answer

A)  provides first-dollar coverage for damage to the insured's own autos 
B)  protects the insured against financially irresponsible drivers who have no auto liability insurance 
C)  doubles the premium for liability coverage 
D)  is available only to drivers with excellent driving records

Question 16

All of the following would be paid under the PAP's Other than Collision coverage except:

Accepted Answer

A)  the car skids out of control due to ice on the road, and hits a tree 
B)  the driver of the car hits a bunny rabbit, loses control of the car, and runs into a ditch 
C)  the windshield gets broken, and there is no known outside cause for the damage 
D)  the car is damaged by a fire the insured negligently started while shooting off fireworks on the 4th of July

Question 17

The PAP only covers losses that occur while the automobile is within the United States, Canada, or Mexico, or being transported between ports thereof.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following claims would not be covered by the Medical Payments coverage in the PAP?

Accepted Answer

A)  The insured is injured because of an accident while driving his motorcycle. 
B)  The insured is struck by a house trailer which had become unhitched from the towing vehicle. 
C)  The insured is intentionally run over by his wife or girlfriend. 
D)  The insured is struck as a pedestrian when the driver of a car loses control.

Question 19

Ron's PAP has a $500 deductible for Collision and a $0 deductible for Other than Collision. Ron collides with a wild deer, causing $6,000 of damage to his car. He can recover from the insurer:

Accepted Answer

A)  $6,000 
B)  $5,500 
C)  $6,500 
D)  $0

Question 20

The "defense" provision of the automobile insurance contract says the insurer:

Accepted Answer

A)  will pay all defense costs, but those costs will reduce the limits of the policy 
B)  will indemnify the insured for expenses incurred as a result of hiring the insured's choice of defense attorney 
C)  does not need the consent of the insured to settle any claim against the insured 
D)  must investigate each and every claim

Exam 12: The Personal Auto Policy

Underinsured Motorist coverage:

You collide with another vehicle and the accident is your fault. You may collect for damages to your vehicle, less the deductible, from your insurance company under Coverage D, Collision, if a premium for Collision has been paid.

Your vehicle is damaged by another vehicle and the accident is the fault of the other driver. You may collect for damages to your vehicle, less the deductible, from your insurance company under Coverage D, Collision, if a premium for Collision has been paid.

Which one of the following is false concerning the PAP?

You are in an automobile accident with an uninsured motorist, and the accident is your fault. Your Uninsured Motorist limits are 10/20 and your medical bills are $22,000.You collect from your UM coverage:

Compulsory Liability Insurance laws are designed to:

Bob loans his car to Norm, and Norm wrecks the car. Both Bob and Norm have PAP's on their owned vehicles, and both men have purchased all four major coverages (A, B, C and D) on their automobiles. Whose policy will pay for this loss on a PRIMARY basis?

Which of the following coverages is provided by the PAP?

If Paul causes a car accident, and the car he hits is driven by an insured motorist, Paul's PAP will pay for the other driver's damages:

All of the following persons are covered under Larry's PAP except:

Latisha runs over a deer with her car. The ACV of her vehicle is $7,250. To repair the damages will cost $4,375. What will the insurer likely pay Latisha for this claim, assuming that her Collision deductible is $500, and her Other than Collision deductible is $200?

Uninsured Motorist coverage:

All of the following would be paid under the PAP's Other than Collision coverage except:

The PAP only covers losses that occur while the automobile is within the United States, Canada, or Mexico, or being transported between ports thereof.

Which of the following claims would not be covered by the Medical Payments coverage in the PAP?

Ron's PAP has a $500 deductible for Collision and a $0 deductible for Other than Collision. Ron collides with a wild deer, causing $6,000 of damage to his car. He can recover from the insurer:

The "defense" provision of the automobile insurance contract says the insurer: